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Ex-NSW minister denies misconduct

Former NSW minister Ian Macdonald has rejected allegations he committed misconduct over his decision to grant a mining licence to a company chaired by ex-union leader John Maitland.

Macdonald, 67, told the NSW Supreme Court that he'd thought there were "strong" public benefits to the company's proposal of a training mine at Doyles Creek in the Hunter Valley.

Under cross examination, the former Labor minister rejected suggestions he hid from cabinet colleagues his 2008 decision to directly allocate a coal exploration licence to the company Doyles Creek Mining because they wanted to open the licence up to expressions of interest.

"You knew a direct allocation to a former union leader, and someone you knew within the Labor Party, would raise concerns," crown prosecutor Michael McHugh SC put to Macdonald on Monday.

"It was a direct allocation to a company of which he was a partner," Macdonald replied. "I disagree."

The former mineral resources minister also denied knowing the area covered by the exploration licence was going to make the mine very profitable.

"I don't believe I thought at that time that this was necessarily a valuable resource. Potentially, yes," he said.

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And he rejected Mr McHugh's suggestion that he had wanted to keep his own department, the Department of Primary Industries, out of the process because they had advised him against directly allocating the licence.

"They advised me that I could do a direct allocation of a training mine with strict conditions," Macdonald said.

Mr McHugh accused Macdonald of committing misconduct in public office without excuse or justification.

"I did not," Macdonald replied.

"You were substantially motivated by the desire to incur a benefit ... to Mr Maitland and DCM (Doyles Creek Mining)," Mr McHugh said.

"Certainly not," Macdonald replied.

Macdonald also denied the he had favoured Maitland, a former CFMEU leader, because it would benefit him after he left parliament.

The Crown alleges Macdonald granted the valuable exploration licence as a favour to his "mate" Maitland, who supported his pre-selection and could potentially help him after retirement from politics.

Macdonald has pleaded not guilty to two charges of misconduct in public office.

Maitland has pleaded not guilty to two charges of being an accessory to the alleged misconduct.